THE GREENE ROOM: By: Ken Greene, Law Offices of Kenneth Charles Greene
This article is the second part of a series- click here for part 1 – to provide updates on licensing and disclosure obligations across the country. As I wrote in my last article, there have been significant legislative and regulatory developments over the past few years that commercial lenders, lessors, brokers and alternative finance providers need to know. If your business includes more than one state, you may find it extremely difficult to navigate the legislative activity in all fifty states, since each has its own rules and regulations. Relying on old articles and maps that you find online (even mine!) can be dangerous in this everchanging landscape. You should also heed the date of this article and make sure you ascertain whether there have been any changes since it was written.
It would be cumbersome and potentially overwhelming for this article to address all the details and minutiae of the licensing and disclosure requirements in every state. Instead, this series of articles will simply outline whether each state has licensing and/or disclosure requirements. If the answer to either question is yes, and you plan on doing business in that state, you would be well-advised to get more information on what exactly needs to be done to be in compliance. Penalties for non-compliance can be quite severe.
GEORGIA:
License:. No.
Disclosures: Yes. For transactions of $500k or less.
HAWAII:
License: No.
Disclosures:. No.
IDAHO:
License: No.
Disclosures: No.
ILLINOIS:
License: Not required to make commercial loans, but brokers must register with the Secretary of State.
Disclosures: Not required of lenders, but loan brokers must present a loan brokerage disclosure statement to any prospective borrower.
INDIANA:
License: No.
Disclosures: Yes.
IOWA:
License: Lenders do not need a license, but brokers must register with the Iowa Division of Banking.
Disclosures: No.
KANSAS:
License:. Yes, if you are a lender making loans with an interest rate of 12% or higher. Loan brokers must register with the Kansas Office of the Securities Commissioner.
Disclosures: Yes.
KENTUCKY:
License: No.
Disclosures: No.
The laws that create these obligations are often complicated. If you are brokering or funding loans, leases or providing alternative financing in the commercial space, you should make sure you have competent professional advice to ensure compliance with the laws of those states in which you intend to do business. The penalties can be severe.
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